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Jessica Darnbrough
While there are still plenty of good opportunities for property buyers at the moment, RP Data’s Tim Lawless believes the market is starting to swing in favour of sellers.
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Speaking to The Adviser, Mr Lawless said a raft of factors is causing buyers to lose some of their leverage.
“We are coming out of the bottom of a correction cycle, so values haven’t improved too much. On top of that, interest rates are very low and we can’t see any upwards pressure on interest rates over the coming year,” he said.
“Finally, rents are going up as well, so that should result in yield improvements. As a result, I think people who are looking to buy are slowly starting to lose some leverage in the market and conditions are starting to favour sellers rather than buyers – which is a fairly new phenomenon.”
Mr Lawless said clearance rates are starting to improve, particularly in Sydney and Melbourne, where rates have been nudging 70 per cent for the past few weeks.
In addition, Mr Lawless said homes are starting to sell faster and the level of vendor discounting is falling.
RP Data confirmed that the average discount on a typical home was 7.5 per cent from its initial list price, while the combined capital cities rate sat at 6.4 per cent.
This time last year the average discount on a typical home was 8.1 per cent, and 7.2 per cent across the combined capital cities.
